OfficeMax Rallies On Potential Boise Cascade Initial Public Offering

The stock price of OfficeMax Incorporated (NYSE:OMX) climbed by 27 percent to $10.59 per share around 10:15 AM, ET on Friday at the New York Stock Exchange, following reports that Boise Cascade, a wood products manufacturer submitted an S-1 application with the Securities and Exchange Commission.

Before November 1, 2004, OfficeMax Incorporated (NYSE:OMX) was doing business as Boise Cascade Corporation. The company changed its name to OfficeMax Incorporated (NYSE:OMX) after the company sold its paper, forest products, and timberland assets for approximately $3.7 billion to Boise Cascade, LLC, a new company established by Madison Dearborn. OfficeMax Incorporated (NYSE:OMX) invested $175 million in Boise Cascade as part of the transaction.

Boise Cascade’s S-1 filing indicated a plan to raise $200 million in a public offering. The offering price and the schedule of the initial public offering (IPO) are not yet determined by the company. According to the filing, OfficeMax Incorporated (NYSE:OMX) owns a 20 percent stake in Boise Cascade, and it is expected to benefit from the company’s initial public offering.

KeyBanc Capital Markets analyst Bradley Thomas suggested that OfficeMax Incorporated (NYSE:OMX)'s investments in Boise Cascade could be worth $600 to $700 million, according to the report from Bloomberg.

On the other hand, David Strasser, analyst at Janney Capital Markets said Office Max owns approximately $110 million Series A, equity units, based on Boise Cascade’s filing. He believed that a payment has been, or will be made to Office Max. He also expects Office Max to receive more than $130 million in payment, and the company will continue to hold stakes in the company.

As of this writing, the stock price of OfficeMax Incorporated (NYSE:OMX) is up by nearly 19 percent to $9.75 per share.

About the author

Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.